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Forming an LLC in Virginia

A limited liability company (LLC) is an excellent legal structure for many small businesses. LLCs offer personal liability protection, tax advantages, and convenience. Forming an LLC in Virginia is easy if you follow the step-by-step process below.

Step One: Choose an Original LLC Name

To help your business stand out from the competition, it's wise to have an original and memorable LLC name. You also must be sure to follow Virginia's naming rules. According to the Virginia Limited Liability Company Act, your LLC name must:

  • Make it clear that your business is an LLC: Your LLC name must contain the words "Limited Liability Company" or "Limited Company." If you prefer, you can use the abbreviation "LLC," L.L.C.," "LC," or " L.C."
  • Be available: Your name must be available. In other words, it must be different from the names of all other registered Virginia businesses.
  • Not contain restricted language: Your LLC name may not contain language that incorrectly implies that the business is a corporation or other type of business structure.

You can search for availability by running an entity name search on the Virginia Clerk's Information System (CIS) website. If there are any exact or confusingly similar matches, you should choose a new name. While visiting this website, it's a good idea to create an account. You can use these login credentials to file your articles of organization in step three below.

We make business formation EASY. Learn about our DIY business formation services here.

Next, you should run an internet screening search. You can do this by typing your desired name into your favorite search engine. This is a quick and easy way of finding out if any major businesses use your LLC name. If you come up with any matches, you should go back to the drawing board and think of a unique name.

Next, you should ensure that no other companies have trademarked your name. The United States Patent and Trademark Office (USPTO) offers a searchable database of trademarks for this purpose. This will help you avoid legal trouble for trademark infringement.

Step Two: Appoint a Registered Agent

All Virginia LLCs must have a registered agent. A registered agent is an individual or an entity that accepts legal paperwork on behalf of your LLC. If someone sues your LLC, the service of process will go to the registered agent.

Under Virginia law, your registered agent must be either:

  • An owner or officer of your business
  • A licensed attorney in the state of Virginia
  • Another business entity that is licensed to operate in Virginia

Your registered agent must have a physical street address (not a PO Box) in Virginia. This address is known as your registered office. The registered agent should generally be available to accept legal paperwork there during standard business hours.

If none of your LLC members or officers can act as your registered agent, you might consider using a registered agent service. With a registered agent service, you will pay a yearly fee to another business. In exchange, they accept legal documents on behalf of your LLC. There are many options for this type of service online.

Step Three: File Your Articles of Organization

To officially form your Virginia LLC, you need to submit a document called articles of organization to the Virginia State Corporation Commission. Articles of organization are like a charter that lays out the main identifying characteristics of your business.

In your articles of organization, you will provide specific basic company details:

  • Your LLC's name
  • Your registered agent's name and their address at your registered office
  • The address of your principal office

Your registered agent must be located at a physical street address in the Commonwealth of Virginia. However, your principal office does not need to be within Virginia. Your principal office address should be the location where you keep your important company documents. This would include your LLC operating agreement (covered in step 4).

You will probably be able to complete your articles of organization yourself. You will just need to fill out the Virginia Articles of Organization form (Form LLC-1011) and submit it to the Corporation Commission. You will also need to include a $100 filing fee. You will find instructions for filing either by mail or online in the form.

Step Four: Create an LLC Operating Agreement

Although Virginia doesn't require an LLC operating agreement by law, it's a good idea to create one. An LLC operating agreement is an internal company document that forms a contract among your LLC members. You can use your operating agreement to put certain critical issues into writing, such as:

  • Your LLC's purpose
  • Ownership percentages
  • Member rights and responsibilities
  • buyout agreement
  • Voting procedures
  • A procedure for dissolving the LLC, if necessary
  • Any other agreements that are important to your LLC members

Having an operating agreement in place will promote more organized company operations. You may need to show this agreement when opening a business bank account or seeking investments. Certain professionals may ask to see your operating agreement before providing your LLC with services.

Single-member LLCs should also have an operating agreement. Although your single-member LLC will not need to create agreements among members, your operating agreement is a crucial company document. It shows that you treat the LLC as a legal entity separate from yourself. This helps to maintain your limited liability status.

Step Five: Comply With Tax and Licensing Requirements

Your business tax and licensing obligations will vary based on your LLC's location and the type of business you operate. It's crucial to comply with these obligations to avoid legal hassles and penalties.

Virginia's Business OneStop provides a helpful flow chart that gives an overview of your state and local tax and licensing requirements.

Tax Requirements

Most businesses that operate in Virginia need to register with Virginia Tax for state taxes. State taxes include employee withholding tax, unemployment tax, sales taxes, etc. To register with Virginia Tax, you will need an Employer Identification Number (EIN).

An EIN is a unique number that the Internal Revenue Service (IRS) issues to companies to identify them for tax purposes. You will need your EIN for:

  • Employee payroll
  • State and federal taxes
  • Opening a business bank account
  • Applying for a company credit card

You can think of an EIN as a Social Security Number for your business. It's easy and free to get an EIN from the IRS. You can apply by mail, fax, or online.

Licensing Requirements

To learn about your local licensing requirements, you should contact the city or county of your LLC's primary place of business. You can find contact information for your local agencies by visiting the Commissioners of the Revenue Association of Virginia.

If your LLC operates in regulated industries, you may need a business license from a state licensing or regulatory agency. This would include truckingprofessional serviceshealth care, and others.

Depending on the nature of your business, you may even need a federal license. Federal licensing requirements are limited to certain business activities. This includes aviation, broadcasting, mining, and several more. To see a complete list of business activities that require a federal license, you should visit the Small Business Administration (SBA) website.

Step Six: Pay Annual Registration Fees

Although Virginia does not require LLCs to file an annual report, you will need to pay a yearly $50 fee to keep your LLC in good standing. You must pay your annual fee every year after the year you created your LLC. The due date will be the last day of the month that you created your LLC. For instance, if you started your LLC in July 2022, your first annual fee will be due by July 31st of 2023. You will pay your annual fee by the end of July every year after that too.

The Corporation Commission will send advance notice of your annual fee to your registered agent. But it's wise to mark your calendar to pay your yearly fee rather than relying on this notice. You can pay your fee using the login credentials you may have created at the CIS website in step one above. The State Corporation Commission provides additional information on payment options and plans.

Virginia LLC FAQs

Why should I start an LLC?

An LLC is a hybrid business form popular with small business owners. An LLC's advantages include personal liability protection, pass-through taxation, and convenience.

With limited liability protection, LLC members are only responsible for their business liabilities up to the amount they invested into the company. This means that your personal assets are protected from your company's debts and lawsuits. So, if someone sues your LLC, your personal bank account, cars, and home will not be at risk. This is not true of all business structures. For example, consider that someone sues your sole proprietorship. In that case, your personal bank account, cars, and other assets could be in jeopardy.

Unlike a corporation, an LLC offers the option of pass-through taxation. With pass-through taxation, you and your other LLC members pay the LLC's taxes through your personal income taxes. This can be preferable to corporate taxes. Corporations are often subject to "double taxation." This occurs when the corporation pays taxes on its profits at the corporate level, and stockholders pay taxes on their dividends.

Another advantage of the LLC structure is the ease of creation and maintenance. If you want limited personal liability, streamlined business operations, and pass-through taxation, you should create a Virginia LLC.

Can I reserve my LLC name?

Yes, you can reserve your LLC name before you officially form your LLC. You will need to submit a Business Entity Name Reservation form to do this. The form contains instructions for submitting by mail or online. You will need to include a $10 state fee. This will reserve your name for 120 days.

Can I operate under a different business name?

Yes, you can do business under a name other than your LLC's name. However, you will need to file a fictitious name registration to do so legally. A fictitious name is also known as a DBA (a “doing business as") name.

You might need a DBA name to provide a new product or service under a different business name. Another reason would be if you would like to expand into another geographical area under a new name.

FindLaw's two-step process can help you to create your Virginia DBA name. If you registered with the Clerk's Information System in the steps above, you could use these login details to complete this process online.

Can I operate my out-of-state LLC in Virginia?

Yes, but you need to register your out-of-state LLC (foreign LLC) with the Virginia State Corporations Commission. If your foreign LLC transacts business without registering in the state of Virginia, you could be subject to fines. Under Virginia law, these fines can be between $500 to $5,000.

To submit your foreign LLC registration, you will need to apply to transact business in Virginia to the State Corporation Commission. You need to include a $100 filing fee along with the application. You can file online or by mail according to the instructions on the application.

Note: State laws are always subject to change through new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Want Help Forming a Virginia LLC?

Fortunately, forming an LLC can be a straightforward process with FindLaw’s Business Formation Service. However, you might want legal advice on your LLC operating agreement, your taxes, and more. An experienced Virginia attorney can give you the advice you need and answer your questions about business formation.

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